Author: Adam Back 2013-07-13 18:42:27
Published on: 2013-07-13T18:42:27+00:00
Jorge Timón, in an email conversation, stated that he sees no need to peg zerocoins to bitcoins. However, it is difficult for a new altcoin to have a stable value without a bitcoin peg on the creation cost of zerocoins since Bitcoin itself is volatile enough. Generally, adding more altcoins dillutes the compute available for a given coin. Merger mining is less desirable for the altcoin since its mining is essentially free on top of bitcoin mining. Hence, the sacrifice method is a simple and stable cost starting point for an altcoin. He also believes that altcoin pegging could be highly controversial. The sacrifice applications require no code changes to bitcoin itself, which avoids discussions about fairness regarding which altcoin is supported, and about sacrifice-based pegging being added or not. Sacrificing bitcoins as a way to mine zerocoins does not require the bitcoin network to validate zerocoin. Bi-directional sacrifice is trickier, allowing previously destroyed bitcoins to be recreated based on the sacrifice of zerocoin. Regarding the exchange rate of zerocoin to bitcoin, Jorge suggests that 1:1 is arbitrary, but it may depend on the extra functionality or value from the characteristics of the other coin. Zerocoin is more CPU expensive to validate, the coins are bigger, but provide more payment privacy (and so less taint). Removing taint may mean that zerocoins should be worth more. However, if any tainted bitcoins can be converted to zerocoin via sacrifice at 1:1, maybe the taint issue goes away. Any coins that are tainted to the point of value-loss will be converted to zerocoin, and consequently, the price to convert back should also be 1:1. Lastly, the p2p transfer is a good idea presented by Adam, which could be implemented.
Updated on: 2023-06-06T19:46:19.834663+00:00